Three men lift a male corpse from a river. As they bend over the dead man, one of his naked legs falls free of his robe to trail in the water. The photograph could be morbid yet it has a grave, numinous beauty thanks to the harmony between the cold, silvery tones of the water, rocks and leafless winter trees and the taut balance of the central scene. To anyone familiar with Renaissance paintings of the Deposition of Christ, the mute grace of this moment of tragedy – the raw carnal reality in tension with the mood of transcendent pity – will be instantly legible. It’s no surprise to discover that the photographer, 36-year-old Azadeh Akhlagi, is influenced by Caravaggio.

Yet this photograph is grounded in contemporary Iranian history. Entitled “Samad Behrangi/3 September 1968”, it is a restaging of the discovery of the body of Behrangi, an Iranian social critic, writer and teacher whose drowning was blamed on the Shah’s regime.

Akhlagi’s gift for weaving hard fact and poetic fiction into an organic whole makes her typical of her generation of Iranian photographers. Eight of these artists, including Akhlagi, can be seen now in Burnt Generation, an exhibition at London’s Somerset House. The show’s title is a phrase used to describe Iranians born between 1963 and 1980 whose youth was marked first by the Islamic revolution in 1979, and then by the Iran-Iraq war which lasted from 1980 until 1988.

Yet despite the threat of violence and repression, bold, inspiring art is pouring from contemporary Iran and no area is more dynamic than photography. In Light from the Middle East, the show dedicated to contemporary Middle Eastern photography at London’s Victoria and Albert Museum in 2012, no fewer than eight of the 30 chosen were from Iran. (Three of those, Newsha Tavakolian, Abbas Kowsari and Shadi Ghadirian, are also at Somerset House.)

According to Martin Barnes, senior curator of photographs at the V&A, these practitioners are building on a foundation that stretches back to the 19th century when photography embedded itself in Iranian culture and later blossomed through 20th-century figures such as the legendary photojournalist Abbas and the photographer and researcher Bahman Jalali (1945-2010) who opened Tehran’s first museum of photography. Digital technology which allows photography to be, in Barnes’ words, “communicated easily, unlike a painted canvas” also plays a crucial part.

The result, says Barnes, is a generation who have embraced photography as a way of “reflecting on events and considering issues of freedom, censorship, tradition and modernity with imagination”.

This exhibition sustains his view. The opening room hosts a series entitled “Look” by Tavakolian. From the young woman sitting on her bed, handkerchief clutched in her hands, two mobiles lying next to her, her face rapt with anguish, to the bald man slumped on his sofa, an expression of angry bewilderment on his face, Tavakolian has coaxed her subjects, all of whom are neighbours in her apartment block, into revealing their inner lives at their most intense and troubled. On the other side of the room, “We live in a Paradoxical Society”, a series by a duo of artists known as Ali and Ramyar, also captures Iranians in their homes. Again, these are scenes of dislocation and estrangement: the old man who stands with his back to his daughter as she smokes a cigarette, her face clouded with resignation. Another confronting his sons as they chop vegetables, one raising a knife with ambiguous menace.

In a country where women must cover their heads in public, what does it mean when Tavakolian shows a young woman – indoors – with a lustrous chestnut mane? Asked if she had difficulty in showing that photograph in Tehran, Tavakolian, who worked as a photojournalist until the media crackdown during the anti-government protests of 2009, replied: “There is more freedom in the art world than in journalism now.” However, the fact that galleries in Tehran are usually discreet spaces with no street façade is no coincidence.

The awareness that too direct an approach risks official wrath has played its part in driving photographers towards an oblique poetry. As a consequence many images reveal – as textual poetry often does – elements of everyday life that would otherwise be missed. In many of these shots, for example, the plethora of patterned carpets in modern interiors which are otherwise barren of ornament remind us of the rich, spiritual aesthetics that simmer beneath Iran’s contemporary face. From the photojournalist Abbas Kowsari, three images from a series entitled “Light” capture the lurid glow cast by the green neon lights – that hue being the colour of Islam – which illuminate religious celebrations in local communities.

The final word must go to “Khoramshahr number by number”, a series by Babak Kazemi who was born in 1983. As a memorial to the devastation inflicted on Khoramshahr, an Iranian city on the Iraqi border whose 220,000-strong population was reduced by a third during the war, Kazemi projected images on to photographs of the metal plates on which Khoramshahr’s house numbers were engraved. Displayed here below a row of the real plates, the anguished faces, bullet-strafed buildings and desolate country roads are layered meticulously so that the blackened, rusted skins with their delicate numerical markings are still visible. Hovering between relic and icon, these exquisite palimpsests of loss are a reminder that art’s duty is not to heal suffering but to honour it.